Category Archives: Market Trends

As the local industrial real estate market continues to march along in what feels like zero percent vacancy, it’s actually 1.5% to 3.0% depending on which report you read and to what size range that report is geared, we are beginning to see a trend among owner-occupied buildings. Something we haven’t seen since mid-2000s, can anyone guess?Continue reading →

First off, thank you very much for reading the Mid- Counties Industrial Quarterly Newsletter. We have been working very hard to deliver real time Local Industrial Real Estate market information and insight based on our 100+ hour per week schedule.

As we reflect on 2015 and the momentum and market share we’ve gained, we want to thank the 30 Owner, Tenants, Buyers and Sellers that we had the privilege of providing our real time real estate knowledge and honest service to in 2015. Without your trust and friendship we would not have been able to complete over $35 million dollars in sales and leasing consideration in ’15 alone. Continue reading →

The Mid-Counties Industrial Quarterly Newsletter has sounded like a broken record for the past 4 quarters: “Limited Inventory For Sale”, “Price increasing with every deal”, Class A properties are being leased quickly and functionally obsolete buildings are sitting a bit longer! Sound Familiar?! Continue reading →

As a local market expert I often get asked by Buyers and Tenants, “What are prices going to do?” Well, if you ask 10 people that question, you will probably get 10 answers, most of them being varied. My response would be, “I have no idea”. However, I can tell you this. The market is extremely dynamic, Right Now! Continue reading →

Most business owners and building owners believe that real estate brokers add value only when a transaction is at hand. The truth is that the level of service today’s top real estate professionals offer goes way beyond the mechanics of closing a deal. Simply put, the bar has been raised much higher than that, and the best in the business believe in delivering a full range of services that enable their clients to strategically plan for their facilities needs on an ongoing basis.Continue reading →

Industrial vacancy in the Mid- Counties fell again in the first quarter of 2014. Just X% of the space stood vacant at the end of March. While the strong demand indicates optimism amongst area business owners, the lack of quality facilities available for expansion could force some businesses into space that does not fully meet their needs.

Not long ago, vacancy was in double digits and owners of empty buildings were bending over backwards to attract rent-paying business to their properties. Moving allowances, signing bonuses, free rent and generous allowances for interior improvements were commonplace. Not so now, as rents have risen, free rent is disappearing and owners are emboldened to offer their properties to the highest bidder, as is-where is.

So, how did this happen, and how did it happen so fast? There are three main reasons: First, the overall economy has improved enough for businesses to take expansion plans off the shelf. Second, the availability of financing for owner/users at fixed rates under 5%. Third, the lack of new product being developed to meet the increase in demand. Combined, these three elements present a significant challenge. Unable to find good quality space that meets their needs, business owners are being forced into less efficient space or to expand piecemeal on a short term basis. This amounts to kicking the can down the road, but the situation is expected to get worse before it gets better. Prospects to develop new projects in a market, already near full build-out, are not good. Surrounding markets have been similarly impacted for the same reasons, further restricting choice. So, if your business has even the remotest plans to make a move, start looking as soon as possible. You will need to be fully informed so that you can make the best decision possible under difficult circumstances.

If you choose to purchase your own facility rather than lease it, you’ll face an even bigger challenge, as almost all the vacancy is concentrated in buildings offered for lease only. Prices for buildings offered for sale have risen dramatically as a result of their scarcity, but users are snapping them up anyway because the favorable financing through the SBA makes owning less expensive than leasing, even before considering the additional tax benefits of ownership.

If you want to optimize your next move, it’s time for you to get up to speed on how market conditions are going to impact your long term decision making. I have the tools, resources and market knowledge to assist you in that effort. My recent experience representing clients looking for space has taught me that getting out there early is the key to a good result. Don’t be one of those who is forced to settle for something less.

Have you heard what AB1103 is? Probably not. Does it effect you? Maybe!

In November of 2007, California passed Assembly Bill 1103 (AB1103), mandating energy bench marketing and energy disclosure for non-residential buildings. AB 1103 requires non-residential business owners to input energy consumption and other building data into the Environmental Protection Agency’s ENERGY STAR Portfolio Manager system, which generates an energy efficiency rating for the building. Ratings are from 1 to 100, with 100 being the most energy efficient.Ifabuildingreachesascoreof75 or higher, owners can apply for an ENERGY STAR plaque. Any building applying for the ENERGY STAR label must have their data certified by a licensed professional engineer.

Implementation Schedule for AB1103

AB 1103 mandated disclosure of a building’s energy data and rating of the previous year to prospective buyers and lessees of the entire building or lenders financing the entire building. The original disclosure date was January 1, 2010, but after several delays, implementation of the AB 1103 bill requirements is finally expected to begin January 1, 2014 according to the following schedule:

(a) On and after January 1, 2014, for a building with total gross floor area measuring more than 50,000 SF.
(b) On and after March 1, 2014, for a building with a total gross floor area measuring more than 10,000 SF & up to 50,000 SF.
(c) On and after January 1, 2015, for a building with a total gross floor area measuring at least 5,000 SF and up to 10,000 SF.

The key determinant of whether AB 1103 disclosures apply is the building’s use classification. If the classification is Group F (Factory), the building is exempt. If the classification is Group S (Storage), AB 1103 applies. While the use classifications are defined under the statewide California Building Code, the local municipality selects the use classification for a particular building in its issuance of the occupancy permit.

Consequently, local interpretations and applications of the use classifications can vary. In the case of industrial buildings utilized for manufacturing, assembly or fabrication activities, the exemption will clearly apply. However, warehouses, depots and distribution centers are likely to be classified as Group S and, therefore, subject to the regulations. In those cases, the occupancy permit documentation is the best means of determining whether AB 1103 applies.